WOOD Flash – Bank of Georgia: thoughts on the Ameria acquisition
Bank of Georgia (BGEO) has officially proposed the acquisition of 100% of Ameriabank of Armenia, and aims to finalise the deal in 1Q24E. In our view, Armenia is not the most interesting jurisdiction that springs to mind. However, the price makes the deal attractive: the acquisition price is USD 304m, and it will be paid in cash to Ameria’s shareholders. According to BGEO's calculations, the price tag implies a 0.65x P/BV on the 10M23 book value and a 2.6x P/E based on the full-year 2023 earnings. We believe that BGEO is very unlikely to be overpaying at these multiples, to buy 100% of a commercially-viable and growing bank. BGEO will mainly utilise the cash on hand at the PLC for the acquisition, and the capital hit at JSC Bank of Georgia (BoG) will be limited to 100-110bpts (vs. 18.5% CET 1 in 3Q23, vs. the 14.7% regulatory CET 1 requirement). We calculate the earnings accretion between USD 70-100m (GEL 185-264m), based on the 2023 earnings. We rate BGEO a BUY, with a price target (PT) of GBP 42.7/share. The bank is trading at 4.6x P/E and 1.1x P/TBV, on our 2024E estimates.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.